December 2025 Newsletter: Immigration Changes, Tax Planning and Christmas on the Costa del Sol

Opening Note

As we head into Christmas and the end of 2025, there have been important developments that affect foreigners living, investing, or planning a move to Spain. New immigration rules, tightening border controls, tax and compliance changes, record property prices and a busy festive calendar on the Costa del Sol all point to a year ahead where planning becomes even more important.

Global News

Global conditions remain mixed, with ongoing geopolitical tensions and uneven growth, but Europe has settled into a period of relative stability. Inflation is no longer the central emergency and the focus has shifted to structural issues such as migration, housing and energy.

For most expats and investors this means fewer sudden shocks and more gradual tightening of rules that affect movement of people, capital and data.

EU News

Schengen Entry Exit System begins
The EU has started rolling out the new Entry Exit System (EES) at external Schengen borders. For non EU travellers, including many visitors and second home owners coming to Spain, passport stamps will gradually be replaced by biometric registration and electronic recording of entries and exits.

In practice this means:

• Stricter and more automated enforcement of the 90 days in 180 days rule.

• Less scope for informal or poorly documented stays.

• Potentially longer queues at border control in the short term, until systems and staff adapt.

EES is also the necessary technical step before the planned ETIAS travel authorisation, expected to begin in the coming years.

Spain National News

New immigration rules in force

In May 2025 a new Immigration Regulation entered into force, updating the main rules that govern residence and work permits. The practical effects for foreigners are significant:

• Clearer paths to regularisation: The different “arraigo” routes have been clarified and expanded. There are now more defined options for social, educational and professional integration, and in some cases a second chance to regularise if a permit has lapsed, instead of falling into a permanent irregular situation.

• Stronger family routes: Relatives of Spanish citizens benefit from more flexible criteria on financial means and cohabitation, which can make it easier to bring close family members under the right conditions.

• Study to work transitions: International students and recent graduates in Spain can move more easily to work permits without having to leave the country, which is important for retaining qualified talent already living here.

The Interior Ministry has already reported a noticeable increase in residency and work applications since the reform took effect, suggesting that many people who were waiting for clearer rules are now starting formal processes.

Tax landscape for expats and investors

For higher earners and asset holders the broad tax picture looks like this:

• The regional wealth tax in Andalucía remains effectively eliminated by a 100 percent rebate, which still makes the region attractive for higher net worth residents who are willing to become tax resident here.

• The national Solidarity Tax on large fortunes continues to apply at state level for net wealth from 3 million euros upwards, which means high net worth individuals need careful planning even if they are in a region with no regional wealth tax.

• The special expatriate regime (often referred to as the Beckham regime) remains in place for those who qualify, allowing certain new residents who move to Spain for work to pay a flat rate on Spanish source employment income for a limited period, rather than progressive personal income tax.

These rules create both opportunities and traps, so anyone considering becoming tax resident in Spain in 2025 or 2026 should review their structure before year end.

Andalucía Regional News

Tourism and “quality over quantity”

Andalucía is on track to surpass last year’s record visitor numbers, moving close to 37 million visitors in 2025. Average spending per tourist has risen significantly compared with pre pandemic levels. The regional strategy is clearly aimed at attracting “quality” visitors who spend more, stay longer and help keep the season open across more months of the year.

Málaga Province News

Property prices at record highs

Málaga province has seen property prices reach new records in 2025:

• The average asking price for second hand housing in the province is now close to 3,800 to 3,900 euros per square metre, around mid teens higher than a year ago.

• In Málaga city, average prices for used property are now above 4,000 euros per square metre, putting a typical flat in the region of 300,000 euros or more, depending on neighbourhood.

• Rents in many areas of the province commonly fall in the 1,000 to 1,500 euro per month range for standard long term rentals.

At the same time, new housing supply is not keeping up with demand. Recent figures show that the number of new dwellings being completed is well below the number of new households created each year. This combination explains why both locals and newcomers experience the market as tight and expensive.

Airport milestone

Málaga Costa del Sol Airport has exceeded 25 million passengers in a calendar year for the first time, confirming its role as a major European hub. This supports sustained demand for hotels, holiday rentals and longer term accommodation throughout the province and gives further confidence to medium term investors.

Local Municipal News

Málaga city budget and investment

Málaga city has presented its 2026 budget of roughly 1.23 billion euros with clear priorities that matter for residents and investors:

• Strong emphasis on housing, including funding toward more than 5,000 planned homes, with over 2,000 already in advanced stages.

• Almost 200 million euros in investment for mobility, green areas, coastal improvements and public facilities, including new parks and beachfront works.

• Continued upgrades to public transport, such as renewal of the bus fleet and expansion of bike and micro mobility schemes.

Approval in December would allow many of these projects to begin from January.

San Pedro coastal regeneration

San Pedro de Alcántara, in the municipality of Marbella, is preparing a coastal regeneration project due to start in early 2026. Key elements include:

• Five new offshore breakwaters designed to stabilise the shoreline.

• Around 150,000 cubic metres of added sand to widen and protect the beaches of San Pedro, Linda Vista and parts of Guadalmina.

• Improvements to the promenade and beach access, with measures to protect nearby dunes and archaeological areas.

This should lead to more stable beaches, better protection from winter storms and a more attractive seafront for residents and visitors.

Upcoming Events – December 2025

Málaga Christmas lights and shows

• The Christmas lights in Málaga city centre are now fully switched on, with Calle Larios once again the main attraction. Light and music shows run several times each evening, drawing crowds from across the province.

• A video mapping show on the facade of the cathedral tells a short Christmas story and runs in loops in the evenings, adding another focal point to the festive route through the historic centre.

Torremolinos festive programme

Torremolinos has launched a full Christmas programme stretching from the start of December into early January, including:

• Official lights switch on, concerts and children’s activities in the town centre.

• Markets, food stalls and performances in different squares.

• Events leading up to the Three Kings parade in early January.

Estepona Christmas park and markets

Estepona has opened its Christmas park with an ice rink, Santa’s house and various rides, alongside its main lights and decorations:

• Festive markets and food stands are spread through the centre.

• Activities run through most of December, culminating in the Three Kings parade on 5 January.

Marbella and the Three Kings

Marbella’s old town and seafront are lit for Christmas, with markets and smaller events across December. The highlight remains the evening of 5 January when the Three Kings parade brings floats, music and sweets through town, an important date for families with children.

Private Sector & Business News

Company creation and business climate

Málaga province remains one of the most dynamic business areas in Spain:

• Close to 60,000 companies are now registered with Social Security in the province, making it the leader in Andalucía and placing it among the top provinces nationally.

• Hundreds of new companies continue to be created each month, particularly in services, hospitality, technology and real estate related activities.

This reflects a strong entrepreneurial base, but also means greater competition and ongoing pressure on commercial rents and staffing.

Tourism and hotel performance

Hotel data for late 2025 show a solid, although more normalised, picture after the post pandemic boom:

• Occupancy rates remain healthy and in many cases slightly above last year, with a high proportion of international guests.

• Average revenue per guest has softened compared with 2024, indicating that operators are having to work harder on pricing and value to maintain volumes.

For investors and operators, the message is that the Costa del Sol remains attractive, but margins cannot be taken for granted.

Self employed push back

On 30 November more than a thousand self employed workers marched through Málaga city centre as part of coordinated demonstrations nationwide. They are demanding:

• Fairer social security contributions linked more realistically to income.

• Better access to unemployment cover and sick leave.

• Simpler and more predictable rules for reporting and paying taxes.

The government has already stepped back from a general increase in contributions that was planned for 2026, but pressure for deeper reform continues.

Verifactu digital invoicing delayed to 2027

The government has decided to delay the mandatory implementation of the Verifactu digital invoicing system: companies that pay corporate tax will not be obliged to use Verifactu until 1 January 2027, and most self employed will have until 1 July 2027. The delay responds to strong pressure from small business and autónomo associations who argued that the original 2026 deadlines were unrealistic.

For businesses this means:

• More time to choose and implement compliant invoicing software.

• A temporary easing of cost and administrative pressure in 2026.

• A clear signal that, although deadlines have moved, the system will still arrive, so early planning remains sensible.

Why This Matters

• Immigration and residency: The new Immigration Regulation opens more structured paths to regularisation and to move from study to work, but it rewards those who plan ahead and keep paperwork up to date. Combined with stricter external border controls, it is riskier to rely on informal arrangements.

• Tax and wealth planning: The combination of regional relief in Andalucía, national wealth and solidarity rules and the expatriate regime creates opportunities for those who structure their affairs properly and real exposure for those who do not. Anyone considering becoming tax resident in Spain in 2025 or 2026 should seek advice before year end.

• Property and housing: Record prices and tight supply in Málaga province suggest that the market remains under pressure. Buyers should not assume that waiting will automatically bring lower prices, while landlords and investors need to keep an eye on evolving regulation and local political pressure around housing.

• Tourism and infrastructure: Airport records, city investment programmes and coastal regeneration projects all point to long term confidence in the Costa del Sol as a place to live, holiday and invest. These projects typically support medium term property values and business prospects, although they can also bring disruption while works are underway.

• Small business and compliance: The delay of Verifactu gives companies and self employed some breathing space, but the direction of travel is clear: more digital reporting, more real time data and tighter control from the tax authorities. Using the next year to modernise systems voluntarily will put businesses in a stronger position when the rules finally bite.

Closing Note

December is a good time to enjoy the lights, slow down a little and at the same time take stock. If you are thinking of moving to Spain, changing residency, buying or selling property, or restructuring your business for 2026, the combination of new immigration rules, digitalisation of tax controls and a tight housing market makes preparation more important than ever.

MAE Consulting is here to help you navigate the bureaucracy, structure things sensibly and make the most of life and business on the Costa del Sol.

Wishing you a Merry Christmas and a prosperous New Year.